Wednesday saw gold futures follow the downward tack of the common currency of the European Union as the latest flashpoint of the sovereign debt scourge prepares for a change of power next month, according to Reuters.
Spanish and Italian government bonds remained near euro-era high levels on Wednesday as the region's monetary unit dropped in value. In turn, the U.S. dollar advanced, which pushed down gold futures as bullion and the greenback typically perform the inverse of one another.
"To be sure, evidence of appetite from physical buyers provides some comfort, but it is too early to say if this indeed marks a return of serious physical demand," states a note penned by strategist Edel Tully with UBS, according to Reuters. "A stronger response from the physical community is needed for gold to form a more solid foundation for a recovery."
At 7:22 a.m. on Wednesday, gold futures fell 0.73 percent, a $12.50 slide to $1,689.90 per troy ounce.
The uplifting circumstances that came with the election of a new leader in Spain have come and gone after the nation elected Mariano Rajoy on Sunday, according to The Telegraph. As economic and financial optimism subside, Rajoy is preparing to lead the nation in the middle of next week.
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